UK government unveils ILS domicile plans

The UK government plans to change regulations to allow insurance-linked securities (ILS) to be domiciled in the country.

The plans were revealed by George Osborne, the UK Chancellor of the Exchequer, today (Wednesday March 18) in his final budget speech before the May election.

He said that he believes the use of ILS and reinsurance more generally represents an important growth sector and wants the UK to be at the centre of developments in this field.

“Financial services are one of Britain’s most important and successful industries, employing people in every corner of the country. We take steps to promote competition, back FinTech and encourage new business like global reinsurance,” said Osborne.

In the budget 2015 document, it said that government wants to explore options to attract more reinsurance and other risk-transfer structures to the UK.

“To take this forward, building upon the UK’s position as a world leader in the global insurance market, the government will work with the industry and regulators to develop a new competitive corporate and tax structure for allowing insurance linked securities to be domiciled in the UK.

“This alternative form of reinsurance makes greater use of capital markets and is a key growth opportunity for the sector,” said the budget.